MICHAEL PIERRO 6078746

Varanasi Ltd. qty units Industry Average

Balance Sheet a) Quick ratio 1.00 :1 1.5:1
2021 2020 b) Current ratio 1.43 :1 2.0:1
Assets ci) Accounts receivable turnover 3.37 times/ year 8 times
Cash $ 6,000 $ 5,000 cii) Average collection period 108.33 days 45.63 days
Accounts receivable (net) $ 22,000 $ 24,300 di) Inventory turnover 5.00 times/ year 10 times
Inventory $ 12,000 $ 14,000 dii) days to sell inventory 73.00 days 36.5 days
Land $ 25,000 $ 25,000
Buildings $ 80,000 $ 80,000
Accum. Depreciation - buildings -$ 33,600 -$ 32,000
Total Asset $ 111,400 $ 116,300

Liabilities and Equity

Accounts payable $ 28,000 $ 25,900
Common stock $ 60,000 $ 60,000
Retained earning $ 23,400 $ 20,000
Total liabilities & Equity $ 111,400 $ 105,900

CASH + SHORT TERM INVESTMENTS + NET RECEIVABLES

QUICK RATIO (FY21) =
CURRENT LIABILITIES

CURRENT ASSETS
Current ratio (FY21) =
CURRENT LIABILITIES

NET CREDIT SALES

Accounts receivable turnover (FY20-21) =
AVG NET ACCOUNTS RECEIVABLE

365
Average collection period =
accounts receivable turnover

COGS
Inventory turnover =
Average inventory

365
Days to sell inventory =
Inventory turnover